The Ramsey Show - App - Married? Both of You Get to Vote on the Budget (Hour 3)

Episode Date: November 6, 2018

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🎵 Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show. Where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thanks for joining us. Open phones at 888-825-5225. 888-825-5225. Patrick is with us in Syracuse, New York. Hi, Patrick.

How are you? Hello, Mr. Ramsey. Thank you very much for taking my call. Sure. What's up? Calling today because I have a question about whether or not I should save up more in my baby emergency fund. The reason is because I work as an exploration geologist for metals mining. And, you know, the industry, it just, you know, it goes through cycles and it goes up and down.

And I'm kind of worried, you know, like maybe I'm at more of a risk of, you know, of, you know, losing my position eventually or something like that. And so... How old are you? I'm 33. How many times have you lost your job? A lot. A lot?

Yeah. What's a lot? Yeah, kind of, well... 20? Two. Maybe. But six years ago, I changed my life, basically, and I went to college and things like that. In your current career, in your current role, how many times have you lost your job? None.

Okay. So your current role is not as volatile as your past role. Sure. Sure. Yeah, I mean, I'm educated, so. Well, your current role is not as volatile as your past roles because you used to lose your job all the time, but now that you're in this position, it's much more stable. Right.

Okay. And so as the industry goes, you know know how often do people in your current role get dumped in the street well i've kind of heard like uh some some folks have you know been out of work 20 of their career and and basically they store up the nuts you know and i got that but um so you've been doing this six years and never been laid off? No, no, no, no. I've only been doing this for about six months. Oh, I thought you said you got your degree six years ago.

No, no, no. Basically, I changed my life in 2012, and then I started going to school. Oh, I see. I got a bachelor's degree. I see. So this is all relatively new. Okay, so the six months is not enough time to gauge whether or not you're there. All right, so here's the thing.

If you think that there's a 50% chance based on logic, not just I heard that there's a lot of people i mean you're dealing with a lot of hearsay the words you're using are worry words they're not facts okay i heard people say and this industry's volatile you've not given me anything that said your supervisor walked in and said dude there's a 50 percent chance by next June you're gone. OK, that didn't happen. That's a fact. OK, that's a fact that would worry the crud out of you.

Right. I mean, you know, or, you know, they've laid off 62 people around me and I'm afraid I'm next in line. That's a fact. But this general idea that, oh oh this is a crazy industry oh and other people i heard those are general worry concepts so really dig in and figure out how much of this is fact and how much of this is there so if the facts tell you after you do a little bit of really digging around and poking around on it um that you have a 50-50 chance of losing your job in the next six months, then I would not be doing the baby steps. I would simply be piling up cash.

It's not changing baby step one. It's just saying we're going to push pause because there are storm clouds on the horizon, and we're going to gather up an umbrella. Then when the storm clouds pass, we'll do the baby steps. And when you get stabilized and so forth. But if you can't get facts that tell you you've got at least a 50-50 chance of being on the street, then just work the plan. How much debt have you got?

So I've got 50 in student loans. I have 11 on my car and 2,000 to a graduate degree program. Okay. And what's your income? I make about $4,000 as a geologist, and then I'm also a veteran with a disability, so I take home about $5,000 a month. Another $1,000 or $5,000 from the veterans? No, no, no, another $1,000.

Okay, so you're making about $60,000 a year? Yeah, take-home pay. Take-home pay. So you're making about $75,000 or $80,000, okay. Right. All right. And how quick can you pay off $63,000 making $75,000 or $80,000? Well, that's the other thing is I just got accepted to an online master's degree through Johns Hopkins.

And so I want to do that, too, to really solidify, you know, like just make sure that, you know, that I always have a position where. And plus, you know, I'm kind of getting older. I started a little bit late. So, like, I want to do my master's before I kind of, like, lose steam. How old are you? 33. Okay. Yeah, you're an old man.

I don't know how you're making it around. Yeah, I know. You know, it's hard. It's hard on the knees and well listen i i would um you you can do what you want to do um if i were in your shoes i would work like a crazy person doing anything i could do cut my lifestyle to nothing and become debt free as fast as possible then i would cash flow my master's degree um and that's how I would work it. You do what you want to do.

But don't confuse the piling up of degrees with security. The piling up of degrees does not create security. That's a confusion a lot of people run into. And you've kind of gotten into that academic world, which is translating some of that message to you. And that's it's not true. I mean, I know people with more degrees than a thermometer and they can't get a job because they don't have walking around since. And so that's not security. You've just got to. Now, I'm not saying to be dumb and I'm not saying don't go get the master's and being except the Johns Hopkins thing.

It's a big deal. Congratulations. Oh, and by the way, thank you for your service to the country. We appreciate you. I would get out of debt. That's what I would do. And then go from there and continue to build your career and build your life. You've done very, very well coming back from the disability,

coming back from, you know, launching your second career after your military service. And you've done a great job. Your thinking skills are clear. You've got a lot of worry. There's a lot of worry in your process here. Dale Carnegie used to say, 80% of the things we worry about never happen. I don't know whether he got that statistic,

but I think it's probably pretty close. This is the Dave Ramsey Show. Why in the world would you trust some random guy in a cube when getting your mortgage? Do you really think he cares about your long-term money goals? Well, he doesn't. Those companies care about getting you into whatever home loan program they're pushing that week. When it comes to ordering a cheeseburger, the meal deal works fine. But let's get real, people. We're talking about the largest investment you'll probably ever make, so don't be naive and trust an order taker who pressures you into a pre-packaged loan. My friends at Churchill Mortgage have been helping my listeners for over 25 years.

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NMLSconsumeraccess.org. Equal housing lender. 761 Old Hickory Boulevard. Redwood, Tennessee 37027. Thanks for joining us, America. Andrew is with us in Galveston, Texas. Hey, Andrew, how are you pretty good good how can i help my company does a profit sharing contribution to my 401k but there's no matching component i didn't know if it'd be better to contribute to this or do like a non-deductible IRA and roll it into a Roth annually. Your company does a 401k with a match from profit sharing, and they don't have a Roth

401k? They don't have a Roth, and it's not a match. There's no match just based off of profit sharing. Oh, okay. So does it go into a 401k, the profit sharing, or is it on the side? It goes into a 401k. Okay. So whether you put money in there or not, they put it in into a 401k, the profit sharing, or is it on the side? It goes into a 401k. Okay, so whether you put money in there or not, they put it in there. That's right.

Very cool. Okay, good. Very neat. Excellent, excellent, excellent. All right. So, hmm. So you should be, when you're at baby step four, you should be putting 15% of your income into retirement. Are you on baby step four?

Yes. Okay. And 15% of your income would be matching first, which you don't have, Roth second, which you don't have at work. So you would do a Roth IRA as an individual. What's your household income? About $300 for Texas. Okay, so you'd have to do the back door to get to the Roth. Are you married?

I am. Okay, and how old are you? 35. Okay, so you can do $5,500 for you, $5,500 for your spouse, that's $11,000. We're trying to get to $45,000, which would be 15% of $300. So you do those two on the back door, which you open them as after-tax IRAs and immediately roll them into Roths is what you do. That's how you do a backdoor Roth.

And then you've maxed that out. Then the only other way to get to $45,000 is go back and put non-matching traditional money into that 401K. Does your wife work outside the home? Yes. And what is her income? About half of that, $300. What has she offered at her work? 6% matching.

Oh, well, we definitely want that. So we'll take that 6%. So the target is 45, okay? And then you just start going and you start deducting off. We're going to take her 6% match, and so that's going to be $9,000. We got $11,000, so we're at $20,000. If we do the

backdoor Roth and her 6% match, does she have a Roth 401k? There's not an option for a Roth 401k. It's just standard 401k. Okay. All right. Then we'll do her 6% match first. We'll do the backdoor Roth IRA second.

That gets us to 20. We need to do 25 more in both the other 401ks, and you can split that up however you need to to get there. You're maxed out at 18 in each um and so um but that's how that's what you're going to you're going to end up with money in all of these right in order to get to 15 so yeah yeah uh and then the the bonus is just the extra profit sharing money you get but that's non-matching and so it doesn't matter it's coming to you either way so yeah just

do the six but the order of attack is matches better than roth is better than traditional and we go down the list in that order it's like rock paper scissors except none of them beat other ones so good job man you're killing it well done great income. Wow. Nicole is with us in Napa. Hi, Nicole. How are you? Hi, Mr. Ramsey. How are you? Better than I deserve.

How can I help? Well, I am just starting Baby Step 2, and I am going in gazelle speed, as you would say, in the total money makeover, but my husband isn't. I manage all of the money for our family. We have our bank accounts set up together, and we are just completely at odds on his outside spending. We have a budget set. We have everything in stone on spreadsheets, and we're just not clicking in on the same page as it relates to his outside spending. Yeah, that's because you're acting more like his mother than his wife.

Yeah. And he's probably tired of that, and so are you. Yes, I am. We're in separate beds right now since Sunday. I just had a breakdown and completely crying over it because I'm sick and tired of being sick and tired. How long have you guys been married? We have been married for 21 years. Yeah. And what's your household income?

We are at $163,000. Okay. Well, you've hit the wall that is very predictable, okay? And sometimes it takes people longer than others. And it can happen to a man or a woman where the other spouse is not involved at all and is on an allowance. He gets tired of being treated like a child, and you get tired of being the only adult. Right. And it crashes.

Inevitably, it crashes. And so I would tell you this. I mean, I don't know what you guys can do. You may need to sit down with a pastor, a good marriage counselor, for sure, to get to moving on the right page. But it could sound something like this. Okay, honey, I've been completely wrong, and you've been completely wrong. We've got to restart this whole thing. I don't want to be your mother anymore.

I need you to be a man. And you don't want me to be a nag, and you want to have a vote in these finances. And so we've got to start again. You now are in charge of the budget with me. As two adults, we are going to look into the future and determine where we want to go. And where we want to go is not spending like we're in Congress. Where we want to go is not being an immature child, me or you.

Where we want to go is we're going to look into the future like two adults and say, we've got to clean up this debt, and we've got to retire with dignity, and we've got to enjoy our life to some degree while we're doing all of that. You get a vote, and I get a vote. But we're going to have mature goals, and we're going to work together. I am no longer going to do a budget and try to tell you what you're going to do. You're going to be a man, and you're going to work beside me. The two of us are going to work together, and we're going to come up with a game plan together.

We both have a vote. That's going to be a little uncomfortable for you because you've been used to being in control, and you're a bit of a control freak. I am. uncomfortable for you because you've been used to being in control and you're a bit of a control freak i am and it's going to be uncomfortable for him because he's kind of used to being lazy about this subject he's had no involvement in any for 21 freaking years yeah yeah and it's overdue he's gonna have to man up and come to the table. Now, does he have to become a spreadsheet nerd like Miss Nicole? No, but we're going to make the decisions on the money together. And so the way it sounds is the nerd of the family, you, in my family, it's me, lays out a budget, and then both of us look at it together,

and together we are going to approve a plan that is good for our future. It's not me telling Sharon what to do. It's not you telling your husband what to do. And he has a vote, and he's going to mess with your little plan. You may lose a few battles with your gazelle intensity, and you need to turn your gazelle intensity off right now until you get him on board. Him being on board and the two of you working together is more important than gazelle intensity to your success. Yeah, you're right, Dave.

Well, thank you so much, and thank you for coming into our home. I thank God for you every day. Well, I'm proud of you, and you guys can do this. And, hey, if you want to get him on the phone and call back, we'll talk to both of you. Well, I appreciate it. There's enough blame to go around here, and neither one of you are bad people, but you've been doing this the wrong way so long that it blew up in your face. And the wrong way is he didn't have a vote,

and you got tired of being the only one carrying all the responsibility. I totally. Yeah, and today it's over. the responsibility. I totally. Yeah. And today's it's over. I ain't your mama. Yep. Ain't your mama. You hit the nail on the head.

That's it. God bless you, darling. Thank you for calling in. This is the Dave Ramsey Show. There's nothing smart about smartphones if your wireless plan is blowing your budget each month. Pure Talk USA offers smarter wireless with unlimited plans starting as low as $20 per month. You never pay data overage fees and we never turn off your data. No contracts, no hidden fees. And if you're thinking our low cost means less

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Where do you live? Chattanooga, Tennessee. Oh, just down the road. Neighbors. Yes, sir. Welcome to Nashville. Good to have you. And all the way up here to do your debt-free scream.

Yes, sir. Cool. How much have you. And all the way up here to do your debt-free scream. Yes, sir. Cool. How much have you paid off? $93,284.57. Yeah. How long did this take? Three years and 10 months. Way to go. Great job. And your range of income during that three years and 10 months? About $93,000 to $130,000. Great. Good job. What do you all do for a living? I'm a police canine handler. Okay. And I'm a client service executive with Cigna.

Oh, great. Very cool. Great jobs. Cool. Fun. Hey, what kind of debt was this 93,000? So we had credit cards, medical bills, and two cars, and two 401K loans. You know, stupid tax.

I call it stupid tax. So you were normal. You had a little bit of everything. Yes. Wow. Very cool. How long have you two been married? 20 years.

Okay. So 17 years into your marriage, 16 years into your marriage, something flipped. What happened? You know, I was driving around at work and, you know, just thinking like you just said, we're normal. And kind of got that feeling. Paycheck to paycheck. Kind of got that feeling one night, you know, come on a sinking ship, you know. Feel like a rat in a wheel.

Yeah. Husband, father to these two kids, you know, and I can't fix it. You know, dad can fix everything. Yeah. And come home one night sitting in the car, fixing the house, and I thought, man, you know, something's got to change. Everything I try is not working. So I dropped my head and started praying. And I've listened to you on and off for several years.

But I thought, oh, we don't need that. It'll never work for us. I got my answer that night. Because you came on the radio right at that moment. Started researching, spent the next hour sitting in the car. And next morning, I had your book. And a week later, you sold my truck. Yeah. Come in, told her, I said, hey, you need to read this book, please. And oh, by the way, I'm selling the truck. Wow. So we had our baby step one thousand dollars and well into our debt. Here we go. Just like that. Wow. So we had our baby step for $1,000 and well into our debt.

Here we go. Just like that. Wow. So, Susan, did you think he'd lost his mind? He's sitting in the driveway for an hour. Well, he would come home late, late at night. I'd be asleep. Oh, okay.

One of those shifts. But then he had these crazy ideas. Yes. The next morning, I was like, okay, because I love you, I will read the book. Okay. But I found out I was like, okay, because I love you, I will read the book. Okay. But I found out I was the nerd. Oh. And so I went ahead on the budget, and I started that with my Excel.

It's probably, you know, 10 times long. You know how it is. Okay. Good. Yeah. Okay. So it became a one-two punch pretty quick. You both jumped on it.

We did. All right. Just like that. Very cool. We did. And we just came back on live on WGLW there in Ch punch pretty quick. You both jumped on it. We did. All right, just like that. Very cool. We did. We just came back on live on WGLW there in Chattanooga. You did, yes. So it's been many years since I've been on that station.

I'm so glad to be back there. We are, too. Yeah, very cool. Very cool. Wow. How's it feel? Amazing. Absolutely amazing.

I mean, 16 years. You've just been running circles and then you go that's it we're done we're done three years and 10 months later boom yes so what do you tell people the key to getting out of that is mine is budget i'm the nerd yeah yeah it's budget budgeting and just having the faith that god's going to lead you in the right direction and selling the truck selling the truck absolutely what truck what kind of truck was it? It was a 2009 Ford F-150. Oh, nice truck. Oh, it was beautiful.

Nice truck. Yeah. That's a beast. Yes. That's a big old payment, too. Yeah, absolutely. We'll get you another one. Absolutely.

You drive like no one else later, you can drive like no one else. Absolutely. There you go. Very cool. And so the budget, selling the truck, and following God. These are your tips for getting. What was the hardest part for y'all?, selling the truck, and following God. These are your tips for getting. What was the hardest part for y'all? Selling the truck.

Well, that probably for him. But these two. Saying no to these two. And just saying, I promise, it's going to get better, and we're going to have more. So just be patient with us. And they're learning now. So that's good. No is a complete sentence.

Yes. Even with preteens. Yes. Wow. good for you i'm so proud of y'all thank you who were your biggest cheerleaders my dad um who is debt-free um mortgage and all so he heard you were doing this and he loved it he's like finally absolutely so he has been our biggest my biggest cheerleader for one, it's a little different. Mine's a little reversed. A lot of the guys that I work with, they think I'm crazy. Sure.

I say, hey, that's fine. And so all their negative and craziness and talk and everything, that just pushed me forward even more. Exactly. I'm going to show you wrong. Yeah, absolutely. How you like me now. I'm going to get payments. Absolutely.

Don't have any payments. It sets me up to live any kind of life I want to live. Yeah. I will say that since then, I broke my foot three days after we became debt free. Oh, wow. Six weeks later, he had heart issue. Yeah. And so had heart surgery a month ago.

Oh, wow. Cash flowed everything. Everything's paid off. It's fabulous. It feels so wonderful. So thank you. It turns, financially turns an emergency into an inconvenience. It does. Absolutely.

I look at you too. I love it. Well done. Very, very well done. Well, we got a copy of Chris Hogan's book for you, Retire Inspired. I want that to be the next chapter in your story and I think it will be, that you're going to be millionaires.

You're making $130,000. You don't have any payments but a house payment. Life's pretty good. Yes. Pretty good. Life is good. Things are heading in the right way now. Yes.

So well done. All right. And the kiddos' names and ages? Steven and Gracie, and they are 12. They're twins. Oh, okay. Perfect. Okay.

So I hit the preteen right on the head there. There we go. Yes. Just barely now, but when you started, they weren't. That's right. All right. That's right. Oh, okay. Perfect. Okay. So I hit the preteen right on the head there. There we go. It's barely now, but when you started, they weren't. That's right. All right. That's right. Nine, yeah. Good deal.

Very cool. All right, Stephen, Suzanne, Stephen, and Gracie. $93,000 paid off in three years and 10 months, making $93,000 to $130,000. Count it down. Let's hear a debt-free scream. All right. Three, two, one. We're debt-free.

I love it. Yeah. Man, oh, man, oh, man. Great job, you guys. Great job. Well, folks, if you haven't checked your calendar, it is November. Thanksgiving is less than three weeks away. Christmas is right after that.

The time to budget for the holidays is right now. The time to budget was six months ago, but you can't do anything about that. So if you haven't downloaded it yet, you need to download our free budgeting app. It is the world's best budgeting app. It's called EveryDollar. Over 5 million budgeters use it. It's easy to set up.

You add your income, your expenses. You start with food, shelter, clothing, transportation, and utilities. Once you take care of those priorities, you fill in the rest of your income, your expenses, you start with food, shelter, clothing, transportation, and utilities. Once you take care of those priorities, you fill in the rest of your goals, like getting ready for the holidays. See, you can still pay cash for Christmas. You're just going to have to make a decision on what you're going to sacrifice to get there. It can be done. But this is the year.

You've got to tell your money what to do. No one accidentally loses, people. No one accidentally wins. People do accidentally lose but winning is an intentional act there's no reason to wait make today the day you take control of your money create a free every dollar budget it's completely free at every dollar.com or you can just download from itunes or Google Play or whatever and get the app. It's free.

You can't beat this, guys. Every dollar gets a name, every dollar behaves, and then you win. Think about how much you're going to make during your working life. Let's say that you averaged from age 20 to age 65. That's 45 years, right? Okay, let's just put that in the calculator. And let's say you averaged $60,000 a year, which is the national average, by the way. Maybe we must have done something wrong.

$60,000 in our 45 times. That's $2.7 million you would make in your lifetime. And by the way, that means you started at average and in 45 years never got a raise. Okay. So you're going to make $3, $4, $5, $6, $10 million, $20 million in your working lifetime or more. You ought to have a plan for it, shouldn't you? That's what having a budget is. That's what every dollar is all about.

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Thomas Jefferson said, We do not have government by the majority. We have government by the majority who participate. Ooh, there it is on Election Day. By the majority of those that participate. That's pretty close to true. Wow, very good. Very good.

Well, open enrollment time for health insurance started November 1st. If you have insurance through your employer, make sure you request the 2019 plan rates so you can review the changes, the coverages, the costs. If there are changes, it's worth checking out your options with an insurance agent who can compare policies to get you the right coverage at the best price. Sometimes you can get an independent policy cheaper than you can through a bad employer policy. So to find an insurance broker that you can trust, go to DaveRamsey.com slash ELP and click on insurance. Rebecca's with us in Houston.

Hi, Rebecca. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks for taking my call. Sure. What's with us in Houston. Hi, Rebecca. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks for taking my call. Sure. What's up? So my brother's an avid listener, and he told me to call you. So I'm 22 years old. I graduated with no debt. I didn't take out any student loans for my undergrad degree. And then I got... how did you do that um scholarships i applied for scholarships uh every year and then also um financial aid how much in scholarships did you get uh i can't i don't know the total i just know i didn't have to pay for anything

yeah what's your degree in uh accounting way. Way to go. Good for you. Okay. Your question is what? So upon graduating, I signed to a company, and they're paying for my tuition for my master's degree. Great. And I also signed for a full-time position as well. Way to go. Yeah. And so my question has been pretty much if I should not complete my master's degree only because I'm from Texas and I will be working full-time in Los Angeles and it's very expensive out there.

And in order to work in a county i don't necessarily need my degree um because i would have to stay out in los angeles for about three years um if i was to work for them and i just think it's more beneficial for me to stay at home you're wrong you're wrong you need to go have an adventure. Okay. They're paying for everything. You get your master's degree. You can't get a CPA without a master's. You know that, right? You actually can. I took a lot of courses in undergrad, and so I'm probably about three classes. Once I finish this semester, I will have all my requirements for my CPA. Are you sure?

Yes, I'm positive. I would just have to take my test. Okay. If you can get your CPA without your master's, you don't have to get your master's. As long as you can get your CPA. I don't care if you got your master's or not. You've got the knowledge to do accounting if you can pass the CPA exam and to be successful and to be successful in the accounting world so I thought I was under the impression nowadays you had to have a master's

to get a CPA that's new information to me yeah that's usually how most people do it but you can do like two degrees in undergrad or you can just take a lot of courses like I did. Okay. But you have a job lined up, right? I do. So if I was to move back to Houston, I would just have to go through that process of finding a job again. Okay. Well, I'm most concerned that you passed the CPA. Okay.

If you can do that and live where you want to live, that's fine. I think you can probably land a job in Houston. What are they offering you in pay in L.A.? The pay right now is about $60,000 for a first year. In Houston, I would probably get about $55,000, but, of course, cost of living is totally different. I got a feeling you might get $60,000. Yeah. You might get 60. Yeah.

You might get 70. Just after talking to you, I think you're going to interview very well. Yeah. And by the way, you should ask for more, especially if you're passing your CPA. When are you going to sit for the CPA? I could, if I didn't finish the degree, I could sit for the CPA, um, starting probably just January. I've already put in my application, so it's just really up to me and studying.

But if I finished my degree, I would pretty much be focusing on school and probably wouldn't start that process until another year. Yeah. No, I'm, the reason I was telling you to go to LA and get your master's was because I thought you had to have your master's to get your CPA, and I was apparently misinformed. But I want you to have your CPA. You're too close. And if you can do that with the plan you've got, that will set you up as far as your academic and sheepskin needs,

your certification needs to move forward in that degree field, you'll do just fine. And then from there, it's going to be about hustle and grind on your part and learning to actually apply all these things that your wonderful brain has wrapped its head around. So, I mean, you obviously are very bright. And so, I mean, academics has come easy to you. So now what you've got to do is learn to make application of all these things you've learned in the marketplace and not just simply be a glorified bookkeeper. But get your CPA, kiddo.

If you're not going to get your CPA, you ought to go do the L.A. thing so that you get your CPA. But if you're going to get your CPA and you want to stay home in Houston, I'm game with that. I'm game. But get you a job and get your CPA and you want to stay home in Houston, I'm game with that. I'm game. But get you a job and get you a CPA. Everything's paid for. You're fine. So don't go in debt. You don't need to go in debt and get your CPA.

Good question. Thank you for calling. All right. Karen is with us in Indianapolis. Hi, Karen. Welcome to the Dave Ramsey Show. Hi. Thank you for what you do.

You're truly an inspiration, Dave. Well, I'm honored. How can I help? I'm trying to prepare for life after divorce, and I'm wondering if I can afford to stay in the house or if I need to consider renting an apartment and how much I can afford for rent. How much is your house payment that you might stay with?

$1,250. And what is your take-home pay? My gross is $50. Take-home is probably $38. I'm not sure. Okay. So that's about one-third of your take-home pay would be the house payment, right? One-third, okay.

About 33%. That's not the end of the world especially i'm guessing you're re-entering the job market uh no i'm working you're working but i mean you're re-entered because of this divorce no i've been working okay and what do you do accounting this is the accounting segment okay so the uh your trajectory on your income going up, are you pretty well stable? It's pretty stable. Okay. Here's the thing. If your payment is much more than a fourth of your take-home pay,

it doesn't leave much wiggle room in your budget to do other things like pay cash for cars in the future, pay cash for Christmas, vacations, and invest for your retirement. Right. And people tend to end up borrowing for some of those things and going the wrong direction if they end up house poor. So this is a little over what I want it to be. Do you have children at home?

No. Is there any reason you want this house? Not really, no. Okay, good. Then I'd probably drop it and get something a little cheaper. Okay. And rent a little while until you emotionally finish going through this mess. Yeah.

So what would you consider a thousand would be like the max? Yeah. Yeah. Okay. Yeah, for a little while, and then let's stop and look and go, okay. Because the point is you can afford more than that, and you can qualify for a mortgage for a lot more than that. Okay.

But the point is you end up giving all your money to the house, and you know what I mean when I say house poor? Yeah, and I don't want that. Yeah, you do accounting, and so there's just no disposable income. There's no wiggle room, no margin in your budget. And the math ends up putting you against the wall with a gun and holding you hostage. And you get, you know, car breaks down. Then you've got a problem and you can't do anything.

Everything's tight because of this stupid house. So I'm letting that house go with the divorce. Let's sell it and take your equity out of it, your portion out of it. And, yeah, that's what I would do. Hey, good question. Thanks for calling in. That puts this hour of the Dave Ramsey Show in the books. We'll be back with you before you know it.

In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, it's Kelly Daniel, associate producer and phone screener for The Dave Ramsey Show. Did you know that in 2017, Dave Ramsey Show listeners paid off $50 million of debt? That's pretty impressive. And it could be you this year. Keep listening for more inspiration.